Radical Transparency

Most employees say that they want to know exactly where they stand with their employer. They ask questions around how they are doing, how much of a raise they will get, and are they likely to get promoted. The reality, however, is that most employees don’t get that level of transparency: Our research at CEB, now Gartner, finds that fewer than 40 percent of employees say their organization is fully open and honest.

The investment firm Bridgewater is famous for its culture of radical transparency, and its founder Ray Dalio is going public with how he actually achieved that within his company via the publication of his new book Principles. His approach, which he outlines in a TED talk and in a recent interview with Fast Company’s Marcus Baram, is based on the concept of an “idea meritocracy” in which all ideas have the potential to be implemented (or criticized) regardless of who has them. Radical transparency serves that meritocracy by ensuring that everyone is free to speak up to, disagree with, and criticize their peers, their managers, and even Ray himself.

The immediate reaction from many in the HR community is that Dalio’s ideas are interesting, but just too radical to work at my organization. While simply applying his approach in the exact same way might not work, some of the underlying ideas and concepts might well be applicable across other companies.

One of Dalio’s ideas that is getting the most attention is the Dot Collector, a tool Bridgewater uses to have employees constantly provide quantitative scores of how other employees are doing on a close to real-time, always-on basis. HR executives have raised several concerns about this approach. In particular, they are concerned that 1) it can put employees in a fear state from being constantly evaluated, and 2) feedback coming from so many people who have limited interactions with someone can be too inaccurate to be useful.

In the New York Times, Alexandra Stevenson and Matthew Goldstein report on allegations by an employee against Bridgewater, the world’s largest hedge fund, which, if true, show how the firm’s culture of “radical transparency” might have, in at least one instance, had a chilling effect instead:

The employee’s complaint with the Connecticut Commission on Human Rights and Opportunities, which has not been previously reported, describes an atmosphere of constant surveillance by video and recordings of all meetings — and the presence of patrolling security guards — that silence employees who do not fit the Bridgewater mold. … In his complaint, Christopher Tarui, a 34-year-old adviser to large institutional investors in Bridgewater, contends that his male supervisor sexually harassed him for about a year by propositioning him for sex and talking about sex during work trips.

After he complained last fall, Mr. Tarui said, several Bridgewater top managers confronted him and sought to pressure him to rescind his claims. One manager, he said, accused him of lying and said that he was “blowing this whole thing out of proportion.” These and other allegations in the complaint could not be independently verified.

Mr. Tarui said he remained silent for many months about the harassment out of fear the incident would not remain private and would impede his chances for promotion at the firm, which is based in Westport, Conn. “The company’s culture ensures that I had no one I could trust to keep my experience confidential,” he said in the complaint, which was filed in January. …